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Eiffel's New Rival

The Eiffel Tower could soon have company in the Parisian stratosphere by an office edifice estimated to cost $1.2 billion. Scheduled to be completed in 2012, the 984-foot Phare Tower will add 1.4 million sq. ft. to La Défense, the 37 million sq. ft. modern business district located just to the west of Paris, near the Arc de Triomphe.

A joint project of the French real estate company Unibail, a major landlord in the submarket, and Public Body for the Development of La Défense, a government agency, the plan for Phare includes such au courant features as wind-powered turbines at the top of the building, which will generate some of the building's electricity, and an outer double skin to provide natural ventilation and daylight.

The design, by American architect Thom Mayne, was the winner in a state-sponsored competition to create a signature building for 4.8 million sq. ft. of new space slated to be built at La Défense between now and 2013.

The project was undertaken in response to concerns that the market was losing its appeal to businesses. For a few rocky years after 2000, vacancy rates for La Défense offices shot above 10%, rents fell, and a number of companies moved to cheaper locations in other suburbs, according to Raphaël Grimaud of Invesco, a major global asset manager.

Grimaud believes that the timing for the 68-story building may be right, since the market already seems to be recovering. Vacancy rates are down to 6.5% in the submarket, he says, absorption is increasing, and there are signs of rent growth. Invesco forecasts an average annual rent growth of 5.86% over the next five years.

However, the success of the Phare project may depend more on the supply of conservative voters in France than tenant demand in Paris. Nicolas Sarkozy, the center-right candidate for president, is a key backer of the high-profile project.

If he loses to socialist Ségolène Royal in the May presidential election, it could be bad news for the Phare. “Things may change in May. It's true that it's a risk,” agrees Yannis de Francesco, associate director, responsible for the La Défense market for Jones Lang LaSalle.

If the proposal does move ahead, some observers believe the Phare will be a valuable addition to the Paris office market. “It is very good for the international image,” says Grimaud.

Some brokers believe that the addition of an avant-garde building to the skyline is just what the city needs to make more international businesses consider making Paris home. “I think we need an architectural event on the La Défense market and in the Paris market,” agrees de Francesco.

But will the Phare be the right kind of event? So far, Mayne's design has won a mixed reception from critics. One sniped that the irregular shape and the crenellations on top make it look like a Muppet's head; another sneered that Phare was “a limp tower” — perhaps not quite the impression of strength and modernity that Sarkozy & Co. hope to convey.

Of course, critics aren't necessarily the best arbiters of the monumental. When the Eiffel Tower was raised as part of a world's fair in 1889, one dismissed it as “a truly tragic streetlamp,” while others described it as “a bald umbrella” or even a “hole-riddled suppository.”